Budget Cuts Cost Denver Families the Chance at Buying Their First Homes

Guest blog post by Rosa Madrigal, Manager, Homeownership Services, Del Norte Neighborhood Development Corporation, NCLR Affiliate

Sold Home For Sale Sign in Front of New HouseOwning a home remains the central pillar of the American Dream.  At Del Norte Neighborhood Development Corporation (NDC) here in Denver, we help several Coloradans reach their dream every year.  Our mission is to ensure that everybody has access to quality and affordable housing.  For more than 30 years, we have addressed the severe housing needs for low- and moderate-income families in the Denver area, the vast majority of whom are Latino.  But crippling budget cuts brought about by sequestration pose a very real threat to our ability to provide those families with the critical housing services they need to purchase a home. 

Del Norte’s Homeownership Program is an invaluable resource that guides those in need through every step of the home buying process.  Our program includes homeownership counseling to assess whether or not a family’s household budget can accommodate homeownership.  If they are not quite ready, we help them establish goals to reach that point.  We also offer monthly homebuyer workshops in English and Spanish and a mortgage program for down payment assistance, usually in the form of a loan with 0 percent interest.  Over the past few years, it was not unusual to receive as many as 20 calls per day from community members seeking information about our pre-purchase counseling and down payment assistance programs.  We generally help as many as 80 people per year secure down payment loans of approximately $6,000.

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Rosa Madrigal giving a homeownership workshop.

Our homeownership program has been largely funded through Community Development Block Grants (CDBG), provided by the Department of Housing and Urban Development. Unfortunately, in 2012 alone, Colorado’s CDBG program lost about $32 million due to sequestration.

In previous years, Del Norte NDC received $200,000 for down payment assistance. Unfortunately, due to the sequestration cuts, we received no funding this year for down payment assistance.  This has drastically affected our ability to provide low-income families with the loans they need to purchase a home.  If they don’t have the funds for a down payment, then they cannot buy a house and generate private investment.  With $200,000 of down payment assistance, the recipients, of whom approximately 88 percent are Latino, generate over $8 million in private investments.

Sadly, we have also lost approximately one-third of our funding for housing counseling services, which are critical for Latinos who are all too often the victims of predatory lending and fraud that eventually lead to foreclosure.  The numbers don’t lie; before sequestration, we served about 600 individuals with counseling per year.  Now, we only serve between 300 and 400 people.

federalbudget_bookThere is a better way to deal with this country’s spending rather than to cut vital programs that help struggling families put a roof over their heads.  All tax increases thus far have come from individuals; corporations have not contributed to the effort.  Any additional deficit reduction should be done by closing wasteful tax loopholes that benefit the top 2 percent and wealthy corporations, not by further cutting federal programs that are crucial for children and working families.

Across the board cuts that jeopardize the health, safety, and security of some of our most vulnerable people is counterproductive to building a stronger America.  They are also evidence of failed political leadership.  This country needs a balanced federal budget, but balancing it on the backs of hard-working Americans is not the solution.  In fact, it only makes the American Dream more difficult to achieve.

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